ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

CAUTION REGARDING FORWARD-LOOKING INFORMATION

Included in this interim report are "forward-looking" statements, within the
meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA") as
well as historical information. Some of our statements under "Business,"
"Properties," "Legal Proceedings," "Management's Discussion and Analysis of
Financial Condition and Results of Operations,"" the Notes to Financial
Statements and elsewhere in this report constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Although we believe that the
expectations reflected in these forward-looking statements are reasonable, we
cannot assure you that the expectations reflected in these forward-looking
statements will prove to be correct. Our actual results could differ materially
from those anticipated in forward-looking statements as a result of certain
factors, including matters described in the section titled "Risk Factors."
Forward-looking statements include those that use forward-looking terminology,
such as the words "anticipate," "believe," "estimate," "expect," "intend,"
"may," "project," "plan," "will," "shall," "should," and similar expressions,
including when used in the negative. Although we believe that the expectations
reflected in these forward-looking statements are reasonable and achievable,
these statements involve risks and uncertainties and we cannot assure you that
actual results will be consistent with these forward-looking statements. We
claim the protection afforded by the safe harbor for forward-looking statements
provided by the PSLRA.

Such risks include, among others, the following: demand for payment of our
convertible notes outstanding under which we are currently in default, our
inability to obtain adequate financing to repay the convertible notes, our
ability to continue financing the operations either through debt or equity
offerings, international, national and local general economic and market
conditions: our ability to sustain, manage or forecast our growth; material
costs and availability; new product development and introduction; existing
government regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this filing.

Consequently, all of the forward-looking statements made in this Form 10-Q are
qualified by these cautionary statements and there can be no assurance that the
actual results anticipated by management will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on our business operations. We undertake no obligation to update or
revise these forward-looking statements, whether to reflect events or
circumstances after the date initially filed or published, to reflect the
occurrence of unanticipated events or otherwise.

StrikeForce Technologies, Inc. is a software development and services company
that offers a suite of integrated computer network security products using
proprietary technology. StrikeForce Technical Services Corporation was
incorporated in August 2001 under the laws of the State of New Jersey. On
September 3, 2004, the stockholders approved an amendment to the Certificate of
Incorporation to change the name to StrikeForce Technologies, Inc. On November
15, 2010, we re-domiciled under the laws of the State of Wyoming. We initially
conducted operations as an integrator and reseller of computer hardware and
telecommunications equipment and services until December 2002. In December
2002, and formally memorialized in September 2003, we acquired certain
intellectual property rights and patent pending technology from NetLabs.com,
Inc. ("NetLabs") including the rights to further develop and sell their
principal technology. In addition, certain officers of NetLabs joined our
company as officers and directors of our company. We subsequently changed our
name to StrikeForce Technologies, Inc., under which we have conducted our
business since August 2003. Our ongoing strategy is developing and marketing our
suite of network security products to the corporate, financial, healthcare,
government, technology, insurance, e-commerce and consumer sectors. We plan to
continue to grow our business primarily through our globally expanding network
and internally generated sales, rather than by acquisitions. We have no
subsidiaries and we conduct our operations from our corporate office in Edison,
New Jersey.

We began our operations in 2001 as a reseller and integrator of computer
hardware and iris biometric technology. From the time we started our operations
through the first half of 2003, we derived the majority of our revenues as an
integrator. In December 2002, upon the acquisition of the licensing rights to
certain intellectual property and patent pending technology from NetLabs, we
shifted the focus of our business to developing and marketing our own suite of
security products. Based upon our acquired licensing rights and additional
research and development, we have developed various identification protection
software products to protect computer networks from unauthorized access and to
protect network owners and users from identity theft.

In November 2010, we received notice that the United States Patent and Trademark
Office ("USPTO") had issued an official Notice of Allowance for the patent
application for the technology relating to our ProtectID® product, titled
"Multi-Channel Device Utilizing a Centralized Out-of-Band Authentication
System". In January 2011, we received notice that the USPTO issued the Company
Patent No. 7,870,599. This "Out-of-Band" Patent went through a USPTO
Re-Examination process starting on January 11, 2011 and concluded on December
27, 2011, with all of our patent claims remaining intact and eight additional
patent claims being added. In 2011, we submitted an additional continuation
patent on the "Out-of-Band" Patent, with approximately forty additional Company
claims now pending. The technology we developed and use in our GuardedID®
product is the subject of a pending patent application.

In January 2013, we were assigned the entire right, title and interest in and to
the "Out-of-Band Patent" (Patent No. 7,870,599) from NetLabs, with the agreement
of the developer, and the assignment was recorded with the USPTO.

In February 2013, we executed a retainer agreement with our patent attorneys to
aggressively enforce our patent rights as we believe "Out-of-Band
Authentication" is becoming the standard for authenticating consumers in the
financial and other markets. Our attorneys have initiated court filings in order
to protect our "Out-of-Band Patent" rights. We also expect to initiate further
litigation against our potential "Out-of-Band" Patent infringers.

In February 2013, our patent attorneys submitted a new "Out-of-Band" Patent
continuation, which is now our second "Out-of-Band" continuation patent pending.

In March 2013, our patent attorneys submitted a new "Methods and Apparatus for
securing user input in a mobile device" Patent, which is now patent pending. Our
MobileTrust® product is the invention supporting the patent pending.

In July 2013, we received notice that the USPTO had added 54 additional patent
claims for our Out-of-Band patent we received in January 2011, by issuing to us
Patent No. 8,484,698 thereby strengthening our position with clients and our
current and potential lawsuits.

We completed the development of our ProtectID® platform at the end of June 2006,
we completed the core development of our keyboard encryption and anti-keylogger
product, GuardedID®, in December 2006 and continue the development of our new
mobile product, MobileTrust®, with continuous enhancements to all, which the
first two are currently being sold and distributed. Our suite of products is
targeted to the financial, e-commerce, corporate, government, healthcare,
insurance, technology, and consumer sectors. We seek to locate customers in a
variety of ways. These include contracts primarily with value added resellers
and distributors (both inside the United States and internationally), direct
sales calls initiated by our internal staff, exhibitions at security and
technology trade shows, through the media, through consulting agreements, and
through our own and agent relationships. Our sales generate revenue either as an
Original Equipment Manufacturer ("OEM") model, through a Hosting/License
agreement, bundled with other company's products or through direct purchase by
customers. We price our products for cloud consumer transactions based on the
number of transactions in which our software products are utilized. We also
price our products for business applications based on the number of users. These
pricing models provide our company with one-time, monthly, quarterly and yearly
recurring revenues. We are also generating revenues from annual maintenance
contracts, renewal fees and expect, but cannot guarantee, an increase in
revenues based upon the execution of various agreements that we have recently
closed and are being implemented.

On April 13, 2012, we entered into a Drawdown Equity Financing Agreement,
together with a Registration Rights Agreement, with Auctus Private Equity Fund,
LLC ("Auctus"), the selling stockholder. In October 2012, we elected to withdraw
our Form S-1/A registration statement and terminate the Drawdown Equity
Financing Agreement with Auctus. We will, however, remain domiciled in Wyoming.

We generated all of our revenues of $188,171, for the six months ended June 30,
2013, compared to $353,081 for the six months ended June 30, 2012, and revenues
of $27,180 for the three months ended June 30, 2013 compared to $168,427 for the
three months ended June 30, 2012, from the sales of our security products. The
decrease in revenues was primarily due to one-time credits of $44,092 applied to
first quarter revenues as a result of the downsizing of one client causing a
delay in the processing of their maintenance fees and due to the decrease in the
sales of our GuardedID® keyboard encryption (anti-keylogger) technology relating
to our initiated litigation with one of our channel partners, WhiteSky, Inc.
("WhiteSky"). In addition we plan to increase revenues throughout the second
half of 2013 with new contracts and increased revenues from current contracts.

We market our products globally to financial service firms, healthcare related
companies, e-commerce companies, government agencies, the enterprise market in
general, and with virtual private network companies, as well as technology
service companies that service all the above markets. We seek such sales through
our own direct efforts and primarily through distributors, resellers and third
party agents internationally. We are also seeking to license the technology as
original equipment with computer hardware and software manufacturers. We are
engaged in production installations and pilot projects with various
distributors, resellers and direct customers, as well as having reached
additional reseller agreements with strategic vendors internationally, including
Canada, South America, Europe, Asia, Africa and the Pacific Rim. Our GuardedID®
product is also being sold directly to consumers, primarily through the Internet
as well as distributors, resellers, third party agents and potential OEM
agreements by bundling GuardedID® with their products (providing a value-add to
their own products and offerings).

We have incurred substantial losses since our inception. Our management believes
that our products provide a cost-effective, more secure and technologically
competitive solution to address the problems of network security and identity
theft in general. However, there can be no assurance that our products will
continue to gain increased acceptance and continue to grow in the commercial
marketplace or that one of our competitors will not introduce technically
superior products.

Our executive office is located at 1090 King Georges Post Road, Suite 603,
Edison, NJ 08837. Our telephone number is (732) 661-9641. We have 7 employees.
Our Company's website is www.strikeforcetech.com. We are not including the
information contained in our website as part of, nor should the information be
relied upon or incorporated by reference into, this Report on Form 10-Q.

Business Model

We are focusing primarily on developing sales through "channel" relationships in
which our products are offered by other manufacturers, distributors, value-added
resellers and agents, internationally. In 2010, we added and publicly announced
a major channel distributor who provides a presence for us in London, England,
representing us in the European Union. We also sell our suite of security
products directly from our Edison, New Jersey office, which also augments our
channel partner relationships. It is our strategy that these "channel"
relationships will provide the greater percentage of our revenues ongoing, as
was the case in 2012. Examples of the channel relationships that we are seeking
include already established original equipment manufacturer ("OEM") and bundled
relationships with other security technology and software providers that would
integrate or bundle the enhanced security capabilities of ProtectID®, GuardedID®
and/or MobileTrust® into their own product lines, thereby providing greater
value to their clients. These would include providers of networking software and
manufacturers of computer and telecommunications hardware and software that
provide managed services, as well as all markets interested in increasing the
value of their products and packages, such as financial services software,
anti-virus, government integrators and identity theft product companies.

Our primary target markets include financial services such as banks and
insurance companies, healthcare providers, government agencies through
integrators, technology platforms, e-commerce based services companies,
telecommunications and cellular carriers, technology software companies,
government agencies and consumers, especially for our mobile and keystroke
encryptions products. We are focusing our concentration on cyber security and
data breach strategic problem areas, such as where compliance with financial,
healthcare and government regulations are key and stolen passwords are used to
acquire private information illegally. In the fourth quarter of 2011, we
executed a multi-year contract with a major US financial lender who utilizes our
ProtectID® solution for its over 12,000,000 employees, administrators and
consumers. The contract became revenue producing in the fourth quarter of 2011
for a three year auto-renewable term. In the first quarter of 2012, we executed
a multi-year contract with a healthcare facility who utilizes our ProtectID®
solution for its employees and administrators. The contract became revenue
producing in the first quarter of 2012 for a three year auto-renewable term.
During the second half of 2012 StrikeForce signed on additional distributors and
resellers from which we started to generate revenues in 2013, as they
implemented their sales strategies for our products.

Because we are now experiencing a continual recurring growing market demand, we
are developing a sizeable global reseller and distribution channel as a strategy
to generate, manage and fulfill demand for our products across market segments,
minimizing the requirement for an increase in our staff. We have minimized the
concentration on our initial direct sales efforts as our distribution and
reseller channels continue to grow internationally and require appropriate
levels of support.

We seek to generate revenue through fees for ProtectID® based on client consumer
usage in the financial and healthcare services markets, as well as enterprises
in general, through our Cloud Service, plus one-time and annual per person fees
in the enterprise markets which often are for in-house installations of our
product, and set-up and recurring transaction fees when the product is accessed
in our Cloud Service, along with yearly maintenance fees, and other one-time and
recurring fees. We also intend to generate revenues through sales of our
GuardedID® product. GuardedID® pricing is for an annual license and we discount
for volume purchases. GuardedID® pricing models, especially when bundling
through OEM contracts, include monthly and quarterly recurring revenues. As more
agreements are reached by our distributors, we are experiencing monthly
increasing sales growth, through the execution of GuardedID® bundled OEM
agreements. We also provide our clients a choice of operating our ProtectID®
software internally by licensing it or through our hosted Cloud Service or a
hybrid that some clients have implemented. GuardedID® requires a download on
each and every computer it protects, whether for employees or consumers. We have
three GuardedID® products, (i) a standard version which protects browser data
entry only, (ii) a premium version which protects almost all the applications
running under Microsoft Windows on the desktop, including Microsoft Office Suite
and almost all applications running on the desktop and (iii) an Enterprise
version which, in addition, provides the Enterprise administrative rights and
the use of Microsoft's Enterprise tools for the product's deployment. Our new
MobileTrust® mobile product will be priced for the consumer through the
appropriate mobile phone stores, as well as direct sales for higher volume
enterprises, including volume discounts to the degree allowed by the
telecommunications providers.

Our management believes that our products provide a cost-effective and
technologically competitive solution to address the problems of network security
and identity theft in general. Updated guidance for the Federal Financial
Institutions Examination Council ("FFIEC") regulations include the requirement
for solutions that have Two-Factor Out-of-Band Authentication and products that
stop keylogging malware, real time, which our management believes our
proprietary products uniquely and directly address. This new updated guidance
went into effect as of January 1, 2012. Additionally, the 2013 Verizon Data
Breach report, published in April 2013, stated that 80% of all the data breaches
they reported would not have occurred if the corporations used two factor
authentication, such as our ProtectID® system. The report also indicates that
over 72% of the data breaches would most likely not have occurred if the
corporations breached used anti-keylogging software, other than the typical
anti-virus programs. Based on the FFIEC requirement in the latest FFIEC update
that was published in June 2011 (being enforced as of January 2012) and the
latest Verizon Data Breach Report, we have recently experienced a growing
increase in sales orders and inquiries specifically in the financial markets.
However, there can be no assurance that our products will continue to gain
acceptance and continue to grow in the commercial marketplace or that one of our
competitors will not introduce technically superior products.

Marketing

Our multi-channel marketing strategy includes:

1. Direct sales to enterprise and commercial customers. In this effort, we are
purchasing marketing programs and working with our public relations firm
(contracted in 2012), and we are looking at other inside sales alternatives in
order to respond aggressively to inquiries relating to our products.

3. Application Service Provider (ASP) Partners: Our certified SAS 70 third party
service provides a hosting platform that facilitates faster implementations at
competitive prices for our Cloud Service option.

4. Original Equipment Manufacturers (OEM): SFT products are sold to other
security technology vendors that integrate ProtectID® and GuardedID® into their
products (bundling) and services providing for monthly increasing recurring
revenues.

5. Internet sites that sell GuardedID® to consumers and small enterprises, such
as affiliates.

6. Technology and other providers and resellers, agents and distributors
interested in purchasing and or selling our new MobileTrust® cyber solution for
all mobile devices, initially for all Apple and Android devices, that is
expected to be in Beta testing by September 2013.

Our cloud service provider is Hosting.com and we have been under contract with
them since December 2007 when we executed an agreement with a nationwide premier
data center and co-location services provider who functions as an Application
Service Provider for our ProtectID® and GuardedID® products, which require a
secondary server used for the "Out-of-Band" two-factor authentication
technology. We believe that this relationship improves the implementation time,
reduces the cost and training requirements, and allows for ease of scalability
on an as needed basis. The cloud site is also SAS 70 (Statement on Auditing
Standards (SAS) No. 70,) certified, which is critical to providing a secure
compliant service that is required by most of our clients. Our agreement with
the services provider was for a one-year (1) term, initially ending in December
2008 and renewing automatically for one-year (1) terms, and is still in effect.
The relationship can be terminated by either party on sixty days written notice.
The cloud service is compensated by our Company based on a flat monthly fee per
the terms of the contract that can increase as we require additional services.

Intellectual Property

We are working with our patent attorneys to aggressively enforce our patent
rights per the terms of a retainer agreement executed in February 2013. Our
patent attorneys also filed a second "Out of Band" continuation patent that is
now patent pending and, as of July 2013, helped us obtain a second Out-of-Band
patent.

Our firewall product, which was in the research and design phase, is no longer
being developed; therefore, the pending provisional patent application was
allowed to expire. A fourth patent application relating to our ProtectID®
product was combined into the first ProtectID® patent application and the fourth
application was allowed to lapse.

We have four trademarks that have been approved and registered: ProtectID®,
GuardedID®, MobileTrust® and CryptoColor®. We have one trademark that is in the
application process: ID Genie™. A portion of our software is licensed from third
parties and the remainder is developed by our own team of developers while
leveraging some limited external consultant expertise as necessitated. We rely
upon confidentiality agreements signed by our employees, consultants and third
parties to protect the intellectual property rights.

We license technology from third parties, including software that is integrated
with internally developed software and used in our products to perform key
functions. We anticipate that we will continue to license technology from third
parties in the future. Although we are not substantially dependent on any
individual licensed technology, some of the software that we license from third
parties could be difficult for us to replace. The effective implementation of
our products depends upon the successful operation of third-party licensed
products in conjunction with our suite of products, and therefore any undetected
errors in these licensed products could create delays in the implementation of
our products, impair the functionality of our products, delay new product
introductions, damage our reputation, and/or cause us to provide substitute
products.

Business Strategy

We expect to incur significant additional costs before we become profitable. We
anticipate that most of the costs that we incur will be related to salaries,
professional fees, marketing, sales and research & design. We anticipate that we
will increase our sales force by approximately one full-time employee and our
technology staff by approximately two employees during the next twelve months.
At the present time, our monthly cash expenditure burn rate is approximately
$110,000 per month. We expect that our monthly cash usage for operations will
increase in the future due to contracted and anticipated increased volumes and
the preceding additions. We anticipate that the area in which we will experience
the greatest increase in operating expenses is in marketing, selling,
advertising, payroll related to sales and product support, technology and global
strategic business consulting subject to cash availability. We are committed to
maintaining our current level our operating costs until we earn the level of
revenues needed to absorb any potential increase in costs.

Our primary strategy over the remainder of fiscal 2013 is to focus on the growth
and support of our channel partners, including distributors, resellers and
original equipment manufacturers (OEMs). Secondly, our internal sales team will
target potential direct sales in industries that management believes provides
the greatest potential for sales. These include small to medium sized financial
institutions, government agencies, e-commerce, healthcare and enterprise
businesses. We are also executing agreements with strategic resellers and
distributors for marketing, selling and supporting our products internationally.
It is our intention to ultimately utilize distributors, resellers and agents to
generate the bulk of our sales internationally, realizing that this strategy
will take time to nurture. There can be no assurance, however, that we will
succeed in implementing our sales strategy. Although management believes that
there is an increasingly strong market for our products as the need for cyber
security increases globally, we have not generated substantial revenue from the
sale of our principal products and there is no assurance we can secure a market
sufficient to permit us to achieve profitability in the next twelve months.

Competition

The software development and services market is characterized by innovation and
competition. There are several well-established companies within this market
that offer network security systems in our product markets and newer companies
with emerging technologies. We believe that our patented "Out-of-Band"
multi-factor identity authentication platform is an innovative, secure,
adaptable, competitively priced, integrated network authentication system. The
main features of ProtectID® include: an open architecture "Out-of-Band" platform
for user authentication; operating system independence; biometric layering;
mobile authentication; secure website logon; Virtual Private Network ("VPN")
access; domain authentication and multi-level authentication. Unlike other
techniques for increased network security, ProtectID® does not rely on a
specific authentication device or method (e.g., phone, tokens, smart cards,
. . .